TRON (TRX) Rose on the Day of the Binance Hack While Bitcoin, Ethereum and XRP Fell. What Is Holding It Up?

TRON (TRX) has shown remarkable resilience amidst the recent turmoil in the cryptocurrency market, particularly following a significant hack at Binance. While major cryptocurrencies like Bitcoin, Ethereum, and XRP experienced substantial declines, TRX managed to gain 0.8% over the past 24 hours, reaching a price of $0.334. In contrast, the overall cryptocurrency market suffered a 6.5% drop, and TRX currently ranks eighth by market capitalization.

During the same period, Bitcoin fell by 4.5%, Ethereum decreased by 4.6%, and XRP saw a 4.0% drop. Notably, TRX not only resisted this downward trend but also recorded a 1.2% increase over the past week, making its performance especially striking compared to its larger counterparts.

Intraday trading revealed strong momentum for TRX, which spiked by as much as 9.3% at one point and ultimately posted a 2.5% gain earlier in the day. On October 29, TRX reached approximately $0.352, its highest price in the past 90 days, before settling below this level. This raises the question: what factors are keeping TRX buoyant while other major cryptocurrencies falter?

According to TRM Labs, a blockchain analytics company, around $628 million from the Binance hack was moved using the Tron network. The crypto-tracing service MistTrack identified that some of the TRX linked to this hack is associated with an address previously involved in the Phemex exchange exploit. The attacker utilized Tron’s network to facilitate a significant portion of the stolen assets.

Every transaction on the Tron network incurs a fee paid in TRX, unless the sender has staked TRX to cover it. The network subsequently burns the TRX fees collected, effectively reducing the supply of tokens in circulation. This mechanism creates additional demand for TRX, as all transactions—regardless of their nature, including those by attackers—require TRX to cover fees.

While the timing of these transactions suggests a potential link to the hack, further evidence is needed to ascertain whether the hack had a positive impact on TRX’s price. Analysts will be looking for correlations between the burn figures during the hack and the observed price increase.

TRX also benefits from stable support due to its primary operations involving stablecoins, which are tokens pegged to the U.S. dollar. As of October 21, TRON supported approximately $95 billion in stablecoins, with Tether (USDT) making up a significant 97.8% of that total. Data from DefiLlama indicated that Tron generated $23.4 million in monthly fees, greatly surpassing Ethereum’s $6.3 million.

In times of crisis, managing stolen stablecoins becomes more straightforward, as Tether can freeze USDT on the Tron network. Tether and other issuers have already frozen around $2.7 billion in stolen funds, limiting the amount of stolen stablecoins that can be quickly liquidated.

However, the rapid decline following the earlier 9.3% spike suggests that this increase may have been temporary. Short sellers, who profit from falling prices, might have been compelled to cover their positions during the spike, leading to brief buying pressure. Once these positions were cleared, the buying momentum faded, resulting in a net increase of just 0.8%.

TRX has managed to stay above its moving averages, in contrast to Bitcoin, Ethereum, and XRP, which have slipped below theirs. A moving average reflects a cryptocurrency's average closing price over a specific timeframe, assisting traders in identifying trends. TRX’s 20-day, 50-day, and 200-day simple moving averages hover around $0.33, with the coin trading just above these levels, indicating a narrow trading range over recent months.

In comparison, Bitcoin is trading below its 20-day and 50-day averages but remains above its 200-day average. Ethereum is also below its 20-day and 50-day averages, while XRP has fallen below all three. Consequently, Bitcoin, Ethereum, and XRP have all lost short-term support due to the recent sell-off.

BNB, the token associated with Binance, has been particularly affected, experiencing a 6.5% drop in 24 hours—more than Bitcoin, Ethereum, or XRP. In contrast, TRX has performed relatively well this year, up 17.4%, whereas Bitcoin has seen an 11.6% decline, Ethereum has dropped by 24.9%, and XRP has decreased by 32.1%.

Currently, TRX seems to be holding its position. The mechanisms of fee burns and stablecoin transactions provide a robust foundation for TRX, though recent speculation has contributed to its price spike. The stability rests on approximately $95 billion in stablecoins within the Tron network and $23.4 million in monthly fees, both of which depend on ongoing dollar transactions, regardless of broader market sentiments.

Nevertheless, TRX faces a crucial test ahead. Binance has temporarily halted withdrawals to conduct a security review, and resuming withdrawals could lead to a significant influx of coins back into the market. If TRX falls below the $0.33 average as Bitcoin continues to decline, it may indicate a weakening of stablecoin support.

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